Posts Tagged ‘cash’
RCI Bank is a relative newcomer to the UK, but is currently offering some of the best deals out there. We take a closer look at their story as well as reveal their market leading and award winning instant access account and their top fixed rate bond deals.
The story behind RCI Bank is a unique one since it originated from the Renault Group, one of the world’s largest car companies. Developed as their own internal bank, RCI Banque was founded in 1974 and was created in order to meet the need to help customers finance their vehicles. Forty years later and the RCI Banque group is still privately owned by the Renault Group and operates in 37 countries across every continent, lending over €12 billion a year. RCI Bank launched in the UK in 2015 in conjunction with RCI Financial Services who combined have over 200 staff and lend over £2 billion each year.
Despite only launching earlier this year, RCI Bank already has a compelling range of award-winning products. With a range covering a market leading instant access account and fixed term savings accounts up to two years, the focus is on relatively short term cash, which should appeal to anyone with half an eye on future interest rate rises.
Market leading instant access: offering 1.65% AER
The Freedom Savings Account is currently offering 1.65% AER variable gross, which is market leading for this type of account. This top rate is available to both new and existing customers and is free from notice periods, penalties, bonus periods, tiered rates and fees (although a £15 fee for CHAPS transfers applies). What you see is what you get, which perhaps also explains why it has been given a Moneyfacts rating of Outstanding*.
The account is available as a single or joint account and is free to use so you can make unlimited payments and withdrawals without charge. You have the option of interest being paid monthly or annually which will also compound provided you don’t move it to another account. There’s no limit or fees on the number of withdrawals you can make and it can be opened with a low minimum of just £100. You can apply online and RCI Bank state opening an account takes less than 15 minutes, whilst you also benefit from full UK customer support available 7 days a week
Click here to find out more about the RCI Bank instant access account »
RCI Bank short term fixed rate bonds: up to 2.35% AER
For those who are able to tie their money up for a fixed period and are also looking for a competitively priced fixed and regular rate of interest, RCI Bank also offers a duo of fixed rate savings accounts, over one and two years respectively. As you would expect, the rate of interest increases with the fixed term, the 1 year fixed term deposit offering 2.06% AER while the 2 year fixed term deposit is currently paying 2.35% AER. Both accounts have a Moneyfacts rating of Excellent*.
These fixed term deposits offer a guaranteed rate so you’ll know exactly how much you will earn by the end of the fixed term, whilst interest can be paid monthly or annually and can be compounded. Both deposits also give you the flexibility of unlimited top-ups for 30 days from your application however you cannot close your account once opened or make a withdrawal before the end of the term. You can apply online and the account has a low minimum of £1,000.
Click here for more info on the RCI Bank 1 Year Fixed Term Savings Account »
Click here for more info on the RCI Bank 2 Year Fixed Term Savings Account »
Deposit Guarantee Scheme
Deposits held with RCI Bank are not covered by the UK Financial Services Compensation Scheme but instead fall within the scope of the French deposit protection scheme, known as the FGDR or Fonds de Garantie Dépôts et de Résolution. Eligible deposits with RCI Bank are protected, and all of the accounts above are covered by the FGDR, protecting the first €100,000 per customer within the RCI Banque group. As with the FSCS, the protection covers each customer rather than each account and for joint customers, each customer is protected up to €100,000 (so up to €200,000 between them). Since the maximum eligible is based in Euros, the UK sterling equivalent at any given time will depend on the exchange rate between the British Pound and the Euro.
Further information – FDGR
Created by law, the FGDR compensates depositors for an amount up to €100,000 per person, per institution, when a banking institution fails. This guarantee benefits all bank customers, private individuals, businesses of any size and associations. For more information and to check their status, visit www.garantiedesdepots.fr/en.
* Moneyfacts awards valid as at 01.10.2015
AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
For those who are looking for fixed rates or alternative savings ideas this summer, there are signs that the market is beginning to hot up by offering more competitive rates and bringing some much needed innovation. In the second of our two part summer feature, we let you know which savings accounts are performing well this summer by giving you our selection of summer sizzlers from the best the market has to offer.
Regardless of how long you can tie up your money, from instant access to long term savings alternatives, there should be something here for everyone from instant access and guaranteed fixed rates, to Cash ISAs and savings alternatives which offer the potential to beat what are still historically low savings rates.
Instant access – up to 1.40% AER variable
If you are looking for an instant access ISA, Nationwide’s Instant ISA Saver is currently paying 1.40% AER variable interest and can be opened by UK residents aged 16 and over from just £1. This simple, flexible account could be an option to consider if you are new to ISAs or are looking for a low-deposit ISA deal that is suitable for a young person over 16 who wants to start saving. For those who are seeking a non-ISA instant access savings deal and would prefer to receive monthly interest, the Online Instant Access Savings Account from State Bank of India offers an interest rate of 1.25% AER variable which is paid on a monthly basis. A minimum deposit of £500 is required to open this savings account.
Click here to find out more about instant access ISAs »
Click here to find out more about instant access savings accounts »
Instant access cash management – up to 1.63% AER variable
Savings Maximiser is a cash management service that compares the best buys from across the market and by regularly reviewing your accounts and making switches if a better rate is available, aims to secure a consistently competitive rate of interest. Aimed at those who want to retain instant access to their money at all times and have at least £25,000 to keep on deposit, the service offers full banking facilities and is simple, secure and saves you time. With the ever increasing number of savings rates on offer, the pace of change to market leading rates and potential interest rate rises on the horizon, this could be a perfect time to consider Savings Maximiser. Current rates available are up to 1.63% AER variable and there is a fixed monthly fee for this service.
Fair Investment view: “The upside to this type of account is that you have instant access to all of your money, whenever you want it, although there are still a few deals where the headline rate includes a bonus after 12 months so you may still need to plan ahead. However, we are also well into our seventh year of record low interest rates and the returns on offer from instant access are still low. With some signs that this may start to pick up, a cash management service which reviews the best rates for you could be a timely opportunity.”
Click here to find out more about Savings Maximiser »
Short term savings – 2.38% AER fixed for 2 years
For those who are able to tie up their money for two years and are also looking for a fixed rate of interest, the 2.38% AER on offer from Access Bank UK’s 2 Year Fixed Rate Bond is market leading. The minimum deposit is £5,000 and interest is paid at maturity. The account can be set up as a single or joint account and access to account information is online or via telephone. As with most fixed term accounts, no early withdrawals are permitted. You can apply online quickly and securely.
Fair Investment view: “A fixed rate bond such as this offers security for your capital, and you know exactly how much you will paid and when, but with savings rates still at some of their lowest levels of all time, even at 2.38% you could find that this type of savings account is offering significantly lower returns than the rates on offer a few years ago.”
Click here to find out more about the Access Bank UK 2 Year Fixed Rate Bond »
With the top paying savings accounts and cash ISAs struggling to offer attractive returns, peer-to-peer lending accounts are becoming increasingly popular with savers fed up with low interest rates. Peer-to-peer lending sites can offer an alternative to traditional banking and can have the potential to achieve a better rate of interest. Investing your savings in a peer to peer lending scheme can offer better returns than more conventional forms of savings however there are risks, such as your funds not being covered by the Financial Services Compensation Scheme (FSCS).
What is peer to peer lending?
In simple terms, peer to peer lenders match people who want to earn interest on their savings with people who want to borrow money. The advantage of this arrangements is that both savers and borrowers can benefit from interest rates that are better than those found on the high street, whether from conventional savings accounts or from bank loans.
How does peer to peer lending work?
Investors can register with a peer to peer lender, and will usually be offered the choice of how long to commit their money for – for example, some peer to per lenders offer different interest rates in return for locking your cash away for one, two or five years. Your money is then matched with people who want a loan for the same time period.
Click here for our current selections »
With time running out to meet the 5th April end of tax year deadline, we bring you our selection of some of the best Cash and Investment ISAs available. We also include some alternative options for those who are seeking the potential for a higher return while still protecting their money, as well as our best-selling fixed income investment, for those considering investing their existing ISAs or new ISA allowance.
New ISA Rules – Save up to £15,000 in your cash ISA
As a result of new ISA rules which came into effect on 1st July 2014, your ISA allowance for the current 2014/15 tax year is £15,000. You can put some or all of this allowance into an Investment ISA, or some or all of the allowance into a Cash ISA. Bear in mind that that these allowances are per person, so a couple can put up to £30,000 in total into a cash ISA before the end of the tax year. Make sure you remember the most important end of tax year deadline which is midnight on 5th April. Note that many ISA providers will need your application – and possibly your cleared funds – before this date and that some ISA plans have an earlier deadline for ISA transfers.
2015 Cash ISA selections
Instant access Cash ISA selection
If you want to be able to access your money in an instant, the NatWest Instant Access Cash ISA offers a rate of 1.00% (variable) on balances of over £25,000, and a rate of 0.50% (variable) on balances below £25,000. Interest is paid monthly, and transfers in are permitted, meaning that if you transfer in cash from previous years’ ISA you may well be eligible for the higher 1.00% rate as your total amount held may be greater than £25,000. The account is easy to manage in branch, by phone and online, and is open to UK residents aged 16 and over.
Click here to compare other instant access cash ISA options »
Medium term Cash ISA selection
For those looking for a medium-term ISA option, the Aldermore 3 Year Fixed Rate Cash ISA offers a return of 2.20% (gross) with a minimum deposit of £1,000. Interest is calculated daily and can be paid either monthly or annually. Transfers from other ISA providers are available, and the account can be managed by phone, by post or online. You can withdraw cash early if you need to, but be aware that to do so means that you will be subject to loss of interest.
Click here to compare other medium term fixed rate Cash ISA options »
For those who are not prepared to risk their capital to try and achieve higher returns, the ability to rely on traditional savings products has never been more challenging. Savers keen to maximise the level of FSCS protection with their capital have only really had a couple of options historically. Either accept a variable rate but have instant access to your savings, or alternatively sacrifice access and receive a higher interest rate depending on how long you are able to tie up your money.
But as savers continue to face significant falls in the level of income available, more and more of us are having to face the truth about just how serious the situation is. So what are you doing with your savings and have you questioned your decisions in the past? Here we take a look at the harsh reality being faced by savers whilst looking at the pros and cons of the options being considered. Our Head of Savings and Investments, Oliver Roylance-Smith, will also offer his own view in the context of the current savings rates on offer and the outlook for the market in the coming years.
‘Tis the season to be jolly…
Unfortunately the start of advent has not brought with it any gifts for savers. Although the plight of savings rates often takes a back seat to the more economically charged debate around when we might see a rise in interest rates, the ongoing situation for savers is a fairly easy one to square off.
The current Bank of England base rate of 0.5% is the lowest it has ever been, and with the Monetary Policy Committee (MPC) voting again this month to keep it on hold, we are now in the 68th consecutive month of this record low – that’s’ over 5 and half years… So if you’ve ever made a decision on your savings based on the hope that interest rates might go up within the next 12 months, you now have a constant reminder of how painful this can be.
With the headline rate of inflation at its lowest level for five years, this should translate to happier times for both savers and investors. Unfortunately, whether you are taking a short term view, or perhaps looking to the longer term in the hunt for higher returns, trying to factor in the relationship between inflation and interest rates continues to create a real headache for all concerned – we therefore take a look at the latest developments to see if any lessons can be learnt. We also review the current range of savings rates on offer as well as reveal some of the more recent trends we are seeing.
Earlier this month the headline rate of UK inflation, as measured by the Consumer Price Index (CPI), fell to 1.2% for the year to September 2014, according to the latest figures from the Office of National Statistics (ONS). The fall was larger than expected and came as a surprise to many economists who were expecting a smaller reduction.
This sizeable fall of 0.3% on the previous month also means that CPI inflation is now at a five year low and well below the Bank of England target of 2%. In fact, with the exception of September 2009 at the height of the financial crisis when it stood at 1.1%, the current rate is the lowest we have seen for a decade.
What might happen to inflation?
The ONS figures show the weaker inflation recorded in September was a continuation of the trend over the last few months where we have seen falling food and energy prices. Despite a reduction in commodity prices and a strong pound also pushing the headline rate of inflation down, the consensus views seems to be that a period of deflation is not imminent and that inflation should close around 1.4% at the end of 2015 and possibly up to 2% by the end of 2016.
And yet with every inflation report and latest economic data, there are always warnings over potential inflation risk but perhaps a view which should be heard is that of former Bank of England Monetary Policy Committee (MPC) member Andrew Sentance who has said there are parallels between the prevailing economic conditions and those which led to a period in the 1980’s when inflation rose to 10% and interest hit 15%. These ‘conditions’ include low headline inflation, a strong pound, a benign oil price environment, structural change in the financial sector and spare capacity in the economy – perhaps we should at least take note of the possibility of inflation rising quicker than expected.
Investec Bank continues to offer innovative savings plans which combine a competitive interest rate with efficient service and attractive features. So if you have a minimum of £25,000 to deposit, and you want to take advantage of some of the highest savings rates on the market, their latest range of accounts are certainly worth reviewing. With a range including instant access and fixed terms between 1 and 5 years, there should be something for every saver. All the Investec savings accounts featured below are covered by the Financial Services Compensation Scheme (FSCS).
Investec E-asy Access – 1.30% AER
The E-asy Access Account pays 1.30% AER variable with interest paid monthly and there is no bonus included in the rate so what you see is what you continue to get. This is a no notice easy access account and so there is no restriction on the number of withdrawals or who you can pay. The account is available as a single or joint account and access to account information is via online and telephone banking. Interest is paid monthly and will therefore compound unless paid away into another account. You can apply online, request further information to be sent to you via email, or have someone from the bank call you back.
Click here to find out more about the Investec E-asy Access Account »
Time is running out to meet the 5th April end of tax year deadline and so this is your last opportunity to protect your 2013/14 Cash ISA allowance (£5,760) from the taxman. To help you know where our customers are putting their money, we feature our Top 5 most popular Cash ISA plans.
All of the deposit plans below are fully capital protected and eligible for FSCS protection up to the normal deposit limits.
1. The potential for 4.85% annual income
The Target Income Deposit Plan from Investec offers 4.85% each year provided the value of the FTSE 100 Index at the end of each year is higher than 90% of its value at the start of the plan (subject to averaging). If the Index finishes below 90%, no income will be paid although should it meet the required level on any future anniversary, any missed payments will be added back.
Click here for more information »
If the FTSE 100 Index finishes higher than its value at the start of the plan, even if this by just one point, the 5 Year Deposit Plus Plan from Investec will pay a 30% fixed return. If the FTSE has risen by more than 30% then you will receive this higher amount, with no upper limit (subject to averaging).
Click here for more information »
With probably the most talked about Budget for many years and finally one that has gone the way of savers, we give you a 60 second guide to the changes around ISAs and what this will mean for both cash savers and investors.
New tax year, new limits
From 6th April 2014, the annual ISA investment limit for 2014/15 will initially rise by £360 to £11,880 (of which up to £5,940 may be in cash). The limit for the Junior ISA (JISA), which is beginning to attract more investors, will simultaneously rise to £3,840.
More radical reform
From 1st July 2014, more radical changes will occur:
- All existing ISAs will become new ISAs (NISAs), removing the distinction between Cash and Stocks & Shares ISAs
- The maximum you can save into a NISA will rise to £15,000 for the 2014/15 tax year, a further increase of £3,120
- The rule which prevents more than 50% of the total limit being placed in a Cash ISA will be scrapped and so the entire £15,000 NISA contribution limit can go into cash deposits.
- The ban on transfers from Stocks & Shares ISAs to Cash ISAs will be removed, thereby introducing full two-way transferability between deposits and investments and vice versa.
- Investment options will be widened to include, for example, peer-to-peer lending.
- The JISA limit will rise to £4,000 and this will also apply to Child Trust Funds (CTFs). The date from when CTFs can be transferred into JISAs was not brought forward and remains, provisionally, April 2015.